New Delhi: Crude oil price on Wednesday surged to $90 per barrel for the first time since 2014. It may rise further due to political tensions in Europe and the Middle East.
Analysts believe that the price may hit $125 per barrel if the tension between the North Atlantic Treaty Organization (NATO) and Russia over Ukraine translates into war.
In the Middle East, missile attacks by Yemen’s Houthi movement on UAE are also contributing to the supply-demand mismatch.
There is an apprehension that any disturbance in the Middle East or Europe may cause supply disruptions.
Impact on petrol, diesel prices in India
If the crude oil price rises continuously, India may witness an increase in petrol and diesel prices.
Currently, the prices of petrol and diesel in Hyderabad are Rs. 108.2 and Rs. 94.62 per liter respectively. The prices have not witnessed any rise after the Central government’s decision to cut the excise duty.
|Cities||Petrol price per litre||Diesel price per litre|
|Hyderabad||Rs. 108.20||Rs. 94.62|
|Delhi||Rs. 95.41||Rs. 86.67|
|Mumbai||Rs. 109.98||Rs. 94.14|
|Kolkata||Rs. 104.67||Rs. 89.79|
|Chennai||Rs. 101.40||Rs. 91.43|
OPEC+ countries will take steps to ease oil price
Despite the benefit from the rising oil price, the OPEC+ countries are bound to take steps to ease oil prices after a certain level because of two major reasons.
One, the rise in oil price will lead to a burden on the Americans’ pockets and that may strain the relations of Washington and Riyadh. In the current situation in the Middle East, Saudi Arabia will never take any step that may deteriorate relations with the US.
Apart from geopolitics, there is a business angle too. If OPEC+ countries did not take any step to ease oil prices, the shale gas demand will increase.